Taboola (TBLA): Assessing Valuation After Strong Earnings, Profit Return, and Upgraded Revenue Outlook

Taboola.com (TBLA) just reported higher quarterly sales and swung to a profit, while also raising its full-year revenue outlook. These updates are drawing new attention to the company’s stock this month.

See our latest analysis for Taboola.com.

Taboola.com’s strong earnings and upgraded revenue guidance have caught the market’s attention. This has helped fuel a 29.2% surge in its 1-month share price return and contributed to a notable 25.1% total shareholder return over the last year. Momentum has picked up recently, suggesting that investors may be seeing renewed growth potential after a few challenging years. However, the five-year total return remains deep in the red.

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With Taboola.com’s shares surging after upbeat results and guidance, the key question is whether the company is still trading below its true value or if expectations for future growth are already reflected in today’s price.

Most Popular Narrative: 9.9% Undervalued

Taboola.com's most widely followed narrative values the stock at $4.38 per share, above its last closing price of $3.94. This signals optimism about future earnings power, even as the market remains cautious about long-term growth.

The launch of Realize, Taboola's new performance advertising platform, is enabling entry into a much larger pool of display and social ad budgets. This positions the company to capture incremental revenue growth outside of traditional native ad formats. This is expected to materially expand the addressable market and drive a return to double-digit revenue growth in the coming years.

Read the complete narrative.

Want to know what’s fueling this optimistic valuation? The secret sauce is a bold new growth engine and some daring financial targets that set this stock apart from competitors. Discover which future numbers analysts are banking on—these projections might surprise you and could reshape your view of Taboola’s potential.

Result: Fair Value of $4.38 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, slower core growth and dependence on unproven new platforms could limit Taboola.com's ability to sustain the expected earnings acceleration that analysts anticipate.

Find out about the key risks to this Taboola.com narrative.

Another View: High Earnings Multiple Raises Concerns

While the fair value estimate suggests Taboola.com is undervalued, a glance at its price-to-earnings ratio tells a different story. The company trades at 44.9 times earnings, which is over three times higher than the US Interactive Media and Services industry average of 16.6x, and considerably above its own fair ratio of 19.6x. This large premium could expose shareholders to downside if market sentiment shifts or earnings disappoint. Is the current optimism already fully priced in?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Taboola.com Narrative

If you want to test your own perspective or look deeper than the consensus, you can shape your own story from the same data in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Taboola.com.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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